Builders elated over AP IT policy

Vijayawada: The State government's Information Technology (IT) policy is going to give a big boost to the construction activity and would turn into a boon to the builders of Vijayawada-Guntur cities. 

The builders rejoice over the announcement of the IT policy which is encouraging them to start their projects after facing slump in real estate and construction market for a long time. The Information Technology (IT) department has decided to acquire commercial building space of nearly one crore square feet for setting up of IT companies. According to officials, only three lakh square feet space has been acquired so far.

The work on several prestigious projects like high-rise towers and multi-storeyed buildings were launched with high hopes on IT sector space requirement. Recently, the big project companies have also entered an agreement with IT department with regard torental guarantee and high rent payment. 

Interestingly, the IT department has announced bumper offer to builders a rent of Rs 50 per sqft when the average maximum rent is only Rs 25 per sqft in the market. 

Moreover, the IT department gives 18 months rental payment agreement for one lakh sqftand above space. Already the government is encouraging IT companies by providing Rs 1 lakh incentive for one job along with suitable building space.

Nearly 50 small and medium range IT companies have started their operations in the vicinity of Vijayawada and Guntur cities by establishing their offices in private buildings. The builders are now focusing on construction of commercial buildings instead of  residential buildings.  

In fact, the builders of Vijayawada and Guntur cities have been in crisis due to slump in the market. Several builders started construction activity in the last three years predicting huge demand based on Amaravati capital city development.

But majority of the space remained unsold, said Gadde Rajalingam, president of the Vijayawada Builders Association. Nearly 50,000 apartments remained vacant for the last two years in the limits of Vijayawada and Guntur cities, he said.   

Though there is big demand for space from the IT companies, the residential type unsold flats are not useful. The buildings should be constructed under commercial usage plan for IT companies. 

Vemuri Ravikumar, government adviser on NRI affairs and investments, admitted that the huge space is required for establishment of IT companies. But the builders should build the structures with open space for commercial purpose and buildings should be handed over to the government within one year from the agreement date. 

Once the IT companies launch their operations in the private buildings in the two cities, the other residential buildings would also get occupancy slowly, said DivyaPrbha Builders proprietor AllaSivarami Reddy. 

By Patibandla Srinivas